Realtors like to tell each other that home prices are going up and now is the time to buy. I get industry garbage in my inbox every day.
I don't know why they do it...maybe as a little "pep talk". Maybe they are practicing telling the lie a few times to friends before talking with clients.
Whatever the reason, it's gone on forever and this rose-colored attitude is one of the biggest problems with our industry.
Optimism is a wonderful thing...but not when you are advising people how to spend their money.
Today, I was e-mailed this peach: Stars Are Aligned for Buyers – and Time Is of the Essence
Potential home buyers are seeing a fortuitous combination of low mortgage rates, affordable home prices and the first-time home buyer tax credit. And many who thought homeownership wasn’t an option right now appear to be finding ways to make it work. A National Association of Realtors survey shows that first-time home buyer purchases made up 30% of July existing home sales, which were up 7% from June and represented the fourth consecutive monthly increase.
Prices will get more affordable soon.
It’s not often that so many moving parts work in harmony to create the most buyer-friendly real estate market I can remember. But as the buzz surrounding the first-time home buyer tax credit’s Nov. 30 deadline mixes with the chirr of extending and expanding the program, the resounding truth is that the whole scenario is temporary.
Realtors have short memories. Prices were lower not that long ago. And, once this "temporary" stimulus is removed, prices will fall a corresponding amount.1
There hasn’t been, and may never be, a better time to enter the U.S. real estate market, and those who hesitate with hopes of larger tax credits and even lower prices are gambling away the chance at historic savings and incentives. If your buyer clients are highly-qualified and motivated, it’s time they act while fellow first-timers are their main competition. If stimulus programs grow to include all home buyers, demand could start driving prices higher as move-up buyers and seniors who want to downsize get in the game.
Really? There has NEVER been a better time? How about any time from 1992 to 2003?
We all want to see activity increase; it’s good for the economy and for the industry. But think like a first-time home buyer for a moment. Wouldn’t you rather buy with the maximum number of factors on your side? And for many first-timers who buy before Nov. 30, it will mean the difference between owing taxes and receiving a sizeable tax refund.
Maximum number of factors...hmmm...like a looming tidal wave of foreclosures, and a false bottom supported by temporary Government tinkering?
You know the arguments, and you would be doing a disservice to your qualified buyer clients—remember, that’s anyone who hasn’t owned in the past three years—if you didn’t present the facts in a way that shows your broad knowledge, professionalism and, above all, concern. Anyone who buys a home that’s priced competitively in this market, and plans to live in it for five years or more, will see rewards.
And if you present select "facts" in the way that this agent does, you should lose your license.
We all know the saying about lightning not striking twice in the same place. The bolt of energy that current mortgage rates, home prices and the first-time home buyer tax credit are injecting into the housing market will dissipate for those who don’t act now.
And that "dissipation" will lead to lower demand and lower prices.
This article originally appeared on HousingStorm.com
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